Al-Manea: Nuran Bank; A Credit Rating That Strengthens Confidence in the Libyan Market

By Consultant Mustafa Al-Manea

Nuran Bank’s achievement of national and international credit ratings from the Islamic International Rating Agency (IIRA) marks an important milestone in the bank’s development. The significance lies not only in the independent assessment of its financial position, but also in the insights it offers into opportunities to develop Libya’s banking sector, strengthen its ability to attract investment, and expand its international financial relationships.

On October 1, 2026, the agency assigned the bank ratings of A+/A1+ on its national scale and B+/B on its international scale, with a stable outlook for both. These results are significant because they are based on an assessment of several areas, including capital, liquidity, asset quality, profitability, governance, and risk management. This provides a more comprehensive picture of the bank’s position than reliance on a single financial indicator.

The achievement comes at a time when transparency and independent assessments are becoming increasingly important to building confidence in the banking sector, particularly in markets that need to expand their international financial relationships and turn available economic opportunities into sustainable investment and financing activities.

A Libyan-Qatari Partnership with Strategic Dimensions

Al-Nouran Bank is owned by the Libyan Foreign Bank and Qatar Holding LLC. The combination of these two shareholders is one of the factors the agency’s report highlighted as supporting the bank’s ratings.

The Libyan Foreign Bank, which is owned by the Central Bank of Libya, provides the bank with established institutional links to international and Gulf markets, as well as a network of correspondent banking relationships that support foreign-currency transactions, cross-border payments, and trade-related activities. In turn, the Qatari shareholder contributes international investment experience, corporate governance practices, and financial resources, according to the report.

The significance of this model extends beyond bringing together shareholders from two countries. It demonstrates how investment partnerships can help develop Libyan financial institutions and leverage international expertise and relationships to improve banking services and expand business operations.

For investors, a partnership combining national capital and Qatari investment, supported by international financial connections, is a factor worth considering when assessing opportunities in the Libyan market. However, the actual impact of these advantages will depend on the bank’s ability to use them to expand its operations and achieve sustainable growth.

What Do the Numbers Tell Us?

The importance of the ratings becomes clearer when examining the financial indicators underpinning the report. The bank’s strengths extend beyond liquidity to include capitalization, asset quality, and funding sources.

Al-Nouran Bank’s capital adequacy ratio reached 59.6% at the end of 2025, compared with 33.2%, according to the comparison cited in the report. Total equity increased by 69.9% during 2025, followed by a further increase of 20.4% in the first half of 2026. This indicates a capital base that provides a significant buffer against potential risks.

Regarding liquidity, liquid assets amounted to 134% of the funding base in June 2026, while the liquidity coverage ratio reached 208% in 2025. These indicators support the bank’s ability to meet its obligations and withstand liquidity pressures.

In terms of asset quality, the report found that the bank’s non-performing financing ratio stood at approximately 3.6%, compared with a sector average of 19.3% in December 2025. This gap appears favorable for the bank, although the relatively small size of its financing portfolio should be considered when interpreting the comparison.

The importance of these figures lies in their combined effect: a strong capital base, high liquidity levels, and relatively favorable asset-quality indicators. Together, these factors strengthen the bank’s ability to withstand risks, but they do not eliminate the need to develop its core business and diversify its income sources.

Financial Strength Does Not Mean the Model Is Complete

The rating results should be interpreted in light of the entire report, rather than its positive indicators alone. The bank recorded a 46% expansion in total assets during 2025, followed by a further increase of 23.1% through the end of the first half of 2026. However, the report explains that much of this growth was concentrated in highly liquid balances rather than income-generating assets.

Cash and cash equivalents accounted for 97.6% of total assets at the end of 2025, while combined financing and investment exposures represented only 1.1% of assets.

This highlights the central challenge facing the bank in the next phase: how can it move from strong liquidity and a conservative balance-sheet approach toward more effective deployment of resources, expanding banking activities and increasing its ability to generate profits without compromising financial safety?

This challenge is not unique to Al-Nouran Bank. It reflects a broader reality across Libya’s banking sector, where high liquidity levels coexist with limited financial intermediation and restrictions on lending. Addressing this imbalance remains essential if banks are to play a greater role in financing economic activity and the private sector.

Profitability: From Revenue Growth to Sustainable Earnings

The report noted a tangible improvement in Al-Nouran Bank’s profitability during the first half of 2026, supported by growth in banking-service revenues and improved operating leverage. Documentary letter-of-credit commissions, account-maintenance fees, and electronic banking services made notable contributions.

However, the report also cautioned that the limited contribution of financing and investment activities constrains revenue diversification and profitability. Some gains associated with foreign-currency revaluation may also be volatile and may not be repeatable at the same levels.

This observation highlights the distinction between improved results over a particular period and the ability to sustain those results over the long term. Sustainable profitability requires developing core banking income, expanding services, improving spending efficiency, and deploying more assets in income-generating activities under disciplined credit policies.

From this perspective, the next phase of the bank’s development should not be measured solely by asset and liquidity growth, but by its success in translating financial strength into more diversified banking activities capable of serving the economy.

Governance and Risk Management: The Foundation of Institutional Confidence

The agency’s assessment was not limited to financial indicators; it also examined governance, internal controls, risk management, and compliance.

According to the report, the bank’s board of directors consists of eleven members and is supported by five specialized committees covering audit and compliance, risk management, governance, nominations and remuneration, and IT governance. The bank also has independent risk management, internal audit, and compliance functions, with internal audit and compliance reports submitted directly to the board’s audit committee.

These structures reflect the importance of separating operational management from oversight and providing multiple levels of supervision over banking decisions and risks.

Nevertheless, the report identified areas requiring further development, including the representation of independent members on key board committees and the independence of the chairpersons of certain committees. It also noted that work is continuing to assess the governance, risk, and compliance framework and strengthen controls relating to anti-money laundering and counter-terrorist financing.

The report further noted the existence of a plan to address gaps related to environmental, social, and governance (ESG) factors. This includes adopting a formal sustainability policy, integrating these factors into enterprise risk management, and working toward the publication of an annual sustainability report.

These observations do not diminish the importance of the rating. Rather, they place it within its proper professional context: an independent assessment does not merely highlight strengths but also identifies areas that must be developed to sustain performance and reinforce institutional confidence.

Digital Services and Expanding the Customer Base

Digital banking services represent an important avenue for developing the bank’s business. The report noted that the launch of “URIAH” accounts and continued customer acquisition through digital channels could support deposit growth and diversify funding sources.

This step is significant in a market that needs to expand access to banking services and improve their efficiency while offering customers and businesses more convenient channels.

However, digital expansion cannot be measured solely by the number of services available. Its results depend on how widely those services are used, whether they improve the customer experience, expand the deposit base, and increase operational efficiency, while maintaining information security and effective management of operational risks.

If digital development is accompanied by growth in core banking activities, it could help the bank move away from its heavy reliance on liquid balances toward a more diversified model of income sources and asset deployment.

What Does a Stable Outlook Mean?

The national ratings of A+/A1+ reflect the bank’s position under the agency’s national-scale methodology, while the international ratings of B+/B represent its assessment under the international scale, taking into account the sovereign risks associated with Libya.

The two ratings should not be treated as equivalent positions on a single scale, since each has its own methodology and significance. Nor does the international rating, by itself, establish that the bank’s risks are lower than sovereign risks or provide sufficient grounds to judge its ability to obtain external financing on specific terms.

A stable outlook means that the agency’s assessment does not currently indicate an expected direction for a rating change over the period covered by the outlook. It is not a guarantee that performance will continue unchanged, nor does it rule out risks.

The practical value of the rating therefore lies in providing an independent reference that helps investors and financial partners understand the bank’s position, alongside financial and operational statements and other information needed for decision-making.

Libya: Investment Opportunities Require a Realistic Assessment

Promoting the Libyan market does not mean ignoring its challenges, just as acknowledging those challenges should not obscure the opportunities available.

The Libyan economy possesses substantial natural resources and has extensive needs in infrastructure, services, energy, trade, and finance. These needs create potential areas for investment, provided they are assessed against clear criteria for risk, return, governance, and implementation capacity.

In the banking sector specifically, there is a clear need to develop cross-border services, expand correspondent banking relationships, improve corporate and foreign-trade services, and strengthen banks’ capacity to finance productive economic activities.

Given its ownership structure, international links, and new credit ratings, Al-Nouran Bank offers an example worth examining when considering the development potential of Libyan financial institutions. However, applying its experience across the sector requires accounting for differences in banks’ circumstances, including capital levels, liquidity, asset quality, and the regulatory and economic environments in which they operate.

Investment in Libya also requires addressing institutional challenges, improving economic policy stability, strengthening transparency, and developing risk-management tools. These requirements are not exceptions to the rules of investment; they are essential to turning available opportunities into sustainable investments.

The Libyan-Qatari Partnership: An Opportunity to Build on Progress

The partnership between the Libyan Foreign Bank and Qatar Holding gives Al-Nouran Bank institutional resources that can be leveraged to expand financial relationships, strengthen expertise, and develop services.

The partnership becomes even more significant when it produces measurable results, such as growth in core banking business, an expanded customer base, more efficient asset utilization, stronger governance and internal controls, and the development of products and services needed by individuals and businesses.

More broadly, successful investment partnerships within Libyan institutions could strengthen investor confidence in the market’s potential and support the pursuit of new cooperation opportunities between Libya and its regional and international partners. However, this depends on actual results, not merely on ownership structures or the achievement of a credit rating.

The Real Achievement Is Sustainability

Al-Nouran Bank’s national and international credit ratings confirm that it possesses important financial and institutional strengths, most notably its strong capital base, high liquidity levels, favorable asset-quality indicators, ownership structure, and international financial connections.

At the same time, the report clearly identifies challenges involving the limited deployment of assets in financing and investment activities, revenue diversification, sustainable profitability, and the continued development of certain aspects of governance and risk management.

The bank’s challenge, therefore, extends beyond maintaining its current ratings. It must improve its ability to convert available financial resources into productive banking activities that deliver sustainable growth while preserving strong solvency and liquidity levels.

For Libya’s banking sector, the broader significance of this experience lies in the opportunity to promote a culture of independent assessment, transparency, and institutional discipline, encouraging banks to improve their performance according to measurable and comparable standards.

In conclusion, Al-Nouran Bank’s credit ratings represent an important step toward strengthening confidence in Libyan financial institutions. However, the deeper value of this achievement will be determined by the bank’s subsequent sustainable growth, its ability to deploy financial strength in service of the economy, and the practical example it sets for other Libyan banks.

About the Author

Consultant Mustafa Al-Manea is a Libyan lawyer and legal and economic expert with more than 24 years of experience. He has worked with investment institutions, sovereign wealth funds, and banks in several countries, as well as in Libya, and serves as an expert for international research centers.

He worked for years as an adviser to the Governor of the Central Bank of Libya and chaired or served on several of the bank’s executive teams, including the Exchange Rate Committee, the Precautionary Plan Team, the Audit Team, the Trust Restoration Team, and the Cyber Team established to create a legislative environment for digital transformation.

He is also a board member of the Libyan Investment Authority and the Libyan Foreign Bank. He has represented Libya at meetings of the World Bank and the International Monetary Fund and heads the executive team for the Prime Minister’s initiatives and strategic projects.

In addition, he has worked as an expert and lecturer with the American Bar Association and is an accredited member of the European Lawyers Association. He is also a member of the Libyan-American Trade and Investment Council. His published research and articles have appeared in Arab, American, and European newspapers, and he is known for his forthright views on economic and financial transformation.

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